Since the beginning of the financial crisis PE fund raising has been on a decline with 2013 witnessing further decline. Do you expect a reversal of this trend this year?
What we are witnessing is less of a retreat in fund raising and more of a consolidation of the PE industry. Most, if not all, of the successful fund managers like
We have also to consider that the region has witnessed many crises since 2008, and albeit these crises, private equity funds were able to raise hundred of millions of dollars each year. The region has not stopped to be in crisis in one form or another since 2008, but successful private equity managers were able to deliver returns every year as witnessed by the many exits announced recently. Consequently, I don't know of any successful fund manager who was unable to raise money and meet its fund raising target.
Evidence suggest that market sentiment and investment activity is improving in Gulf countries and some of the Arab spring countries like
There is ample private equity activity in the region. Local players have invigorated the deal-making pace in the GCC and
Please consider that a deal takes many years to materialise in PE. For example, the well publicised Kudu deal hit the market in 2012 and until today has not been concluded. This is why PE is sometime referred to as patient equity.
The region has also witnessed a rise in venture capital activity over the past five years, and 2014 will be no exception. This will deepen the investment ecosystem, and make the private sector more prosperous.
Last year saw a number of PE fund announcements but many are yet to close. Does this mean investor confidence in PE is still lagging?
I believe that many funds that has announced their fund raising intention have actually reached first or final closure, especially those that are repeated funds. At least four fund managers were able to raise
What's the size of the dry powder?
The size of real dry powder has decreased considerably as funds reached the end of their investment cycle or refrained from doing new investments. Three years ago the size of the dry powder was estimated to be around
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